Broadcast Retirement Network’s Jeffrey Snyder discusses how retirement recordkeepers select the right technology partner for their platforms with Fintech & Wealth Executive Scott Parry.
Jeffrey Snyder, Broadcast Retirement Network
Well, Scott, it’s so great to see you. Thanks for joining us on the program this morning.
Scott Parry, Wealth Fintech Executive
Yeah, thanks. I’m glad to be here. Thanks, Jeffrey.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, you’ve had a storied career in technology and specifically financial services technology. You know, I’m very interested, and maybe I’ll start off by asking a very high level question. How does a record keeper or service provider identify the right technologies for its customers?
To me, it’s very complex.
Scott Parry, Wealth Fintech Executive
Well, you know, you think about this. If you’re a record keeper, your record keeping software is your business, right? You can’t really be in business without it, right?
So it’s essential to your business, right? So, and most of these firms are not building their own stuff. I mean, larger firms are building their own technology, but that’s sort of going away too.
It’s hard to build a record keeping solution. And there’s some out there that basically, you know, they work, they account for things, they account for the micro penny. And the reality is, so it’s essential to your business to have it, right?
And if you want to grow your business and be at the top and be a top tier player, you’ve got to have a top tier record keeping solution. And you’re basically, you’re dependent on your provider. You know, so I ran the Relias business for a couple of years.
So I’m familiar with Relias and I competed with, you know, SSNC with track and, you know, Schwab’s RT product. Here’s the secret. They’re all the same.
You know, they all do the same thing. They all record keep, you can, you know, they all trade, they all, you know, have participant, you know, front ends. It really is, you know, they’re all pretty much the same.
For me, what was important is the provider, you know, what’s the commitment of the company you’re basically in bed with? Like, you’re making a bet on your provider that they’re going to keep that thing current and they’re going to be state-of-the-art. They’re going, I don’t want to be state-of-the-art.
So I would really, you know, having run Relias when it was part of SunGuard and then we got acquired by FIS in the middle of when I was there and ended up running Relias for FIS. You know, you have to ask the question, how much capital are they going to put into these products? How much time, how much money are they going to spend to get these products to, you know, keep them state-of-the-art?
And we struggled at, you know, when I was at SunGuard FIS, we struggled to get, you know, they’re big companies, right? They have a whole bunch of products that they’re trying to invest in. And so you basically fight for your dollar, you know, to invest in your product versus the other 240 products that SunGuard has in their product suite.
So it’s important to really understand what is the commitment from your provider? What kind of capital are they going to be putting into this solution for the next five years? And where are they going and what’s their history?
Have they been keeping state-of-the-art? When I got to run Relias, people were not that happy because the front end had been kind of gotten stale. Well, we spent some, we got some money and we actually reinvested in Relias’ front end.
And then we brought statements in the house. So we did some cool stuff, but, you know, but that’s the number one question I’d want to know because whether it’s A, B, or C, they all do the same thing. In reality, they all do the same thing.
Jeffrey Snyder, Broadcast Retirement Network
So Scott, it’s all about the commitment. Let’s talk about, you mentioned some of the developing technologies. Certainly the big buzzword in our industry, yours and mine, is artificial intelligence.
A lot of companies are embedding that into their base record-keeping platform. But how do you decide whether or not to go out and develop it yourself or to acquire another company in order to bring it in? Because that’s a big decision.
Either way, that’s a big commitment to buy or to develop.
Scott Parry, Wealth Fintech Executive
Yeah, that’s a good question. I mean, it depends on what record-keepers you’re talking about. I think most of the smaller record-keepers, they’re not going to have the money to do this on their own.
They’re going to need to basically take, you know, take what’s available in the marketplace. If you’re a large company, you’re Fidelity or, you know, some of the larger ones, Empower, maybe you’ve got the capital to build your own, you know, AI tools. But, you know, I think we’re in the infancy of AI.
We don’t really know where it’s going to go and who’s going to be the players to survive and whether they’re going to care about what we do. I think what’s, I did a consulting assignment last year, actually, in the pharmaceutical area. And there was some very cool stuff going on with AI companies building AI tools for specific, like for mental health.
You could literally call an 800 number if you were having a mental health crisis and you could talk to somebody who you thought was real. And it was a complete AI bot that was asking you questions about how are you feeling? Are you feeling suicidal?
Look, all this stuff. And you could say, that’s the last person I’d want to talk to if I’m having a mental health crisis. But the reality is, is trying to get a mental health counselor at 2 a.m. if you’re having a crisis is not so easy, right? And do you want to go to the emergency room? So, that’s a product that was built by, in that industry to be very specific to that particular mental health industry for sort of a real-time kind of emergency care kind of thing. So, the question is, what are the opportunities in the retirement space?
I mean, clearly, when I was running Relias, we didn’t call it AI at the time, we called it intelligent workflow. But we built a tool at Relias that allowed you to do distribution. So, we had one client that went from six full-time employees down to two full-time employees because we built intelligence into the distribution process where basically it could dive into the technology, into the database and see, all right, are you in a term status?
Yes, you’re in a term status. Okay, go to the next step. Do you have this available to you?
Yes, you do. Okay, and then basically, they were just managing exceptions that got kicked out of the intelligent workflow because there wasn’t enough data on that particular person’s process. But if it went through the entire system and every question was checked, it just processed the distribution without any human involvement.
So, I’m sure that’s a good example of what AI can do, but also, look, call center, like AI is really big in call centers. I just described an example in the mental health industry. So, clearly, the retirement game, record-keeping game’s about profit margins, it’s about reducing labor.
If AI can help reduce labor and processing distributions, I know, like in the trust space, it’s about reconciliation. It’s about post-trade reconciliation. Can the AI be intelligently built to do post-trade reconciliations?
That kind of stuff, I think, can certainly cut back on the number of people where they’re just processing exceptions, not actually processing reconciliation. So, I think there’s a lot of opportunity to reduce headcount, which is really what AI is. Unfortunately for people who need jobs, that’s what AI is all about.
I do think there’s opportunity in that space to do it. Where it is right now, I don’t exactly know, but I think there’s certainly opportunity.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, well, the thing about AI, or at least today’s AI, I guess, apparently, it learns. So, it’s gonna be growing exponentially and probably changing. Scott, how have today’s chief technology officers had to adapt?
So, we’ve talked about, you have to know the commitment of your partner, the technology firm that you’re partnering with. But you also have to have a whole bunch of different skills to be that CTO, to be that person to help drive innovation at your company, at your record-keeping company. It’s an evolved role.
It’s no longer just, hey, how does technology plug and play? You’re doing a lot more.
Scott Parry, Wealth Fintech Executive
Well, if you have a CTO, you’re probably a pretty good-sized firm. So, I don’t think most small record-keepers would have a CTO role, per se. When I was a CTO at Citizens Wealth, for me, it was about prioritizing.
I had 20 people asking me for stuff all day long. So, we built a whole process to sort of prioritize what was gonna get done. We only had a certain amount of resources to do what we wanted to do.
And we would prioritize things by revenue opportunity, cost savings opportunity. So, that was for me to understand, I got 100 requests. I can only get 20 done this quarter.
Like, okay. And you can’t be negotiating, sort of people buying you dinner to get you to do their thing. No, you can’t do that.
You have to have a real facts-based, numbers-based, is it gonna add revenue, or is it gonna save costs, reduce costs somehow? Those were big drivers. So, that’s important.
And once again, getting back to your vendors, when I was in that role, I had 110 different solutions that I was responsible for, were all working from investment, which was probably our biggest relationship, which was millions of dollars per year to investment, down to, we moved from SCI to InnoVest for trust systems. So, it’s about managing your vendors, really. Once again, who’s gonna be staying on top of stuff?
Who’s investing? And by the way, SCI went through a huge change from their old Trust 3000 to their new wealth management platform. Didn’t go so well, right?
So, not just that they’re investing, but did they do a good job? Are they really hitting on all cylinders in terms of building and designing what they’re trying to do? And how much work is it gonna be for you to move from one system to the next?
If it’s got a completely new system that you’re gonna have to retrain everybody, this is what we did. It’s like, well, we’re gonna have to retrain everybody. Let’s go out to bid.
Let’s just see who else is out in the market. We ended up leaving SCI and going to InnoTrust and InnoVest, which is now an SS&C company. So, for me as a CTO, it was really, once again, who are your vendors?
What’s their commitment? What are the priorities? How much resources do you have?
What can you get done this quarter versus next quarter? Who are you listening to? Clients, what’s the technology you’re actually using for project management?
We have some really cool, there’s a cool piece of technology called AHA, A-H-A, which is for project management. It’s great. Actually, I can build a website for my client.
If they wanted any requests, they just go to the website, they just put in, we’d like to have this done. It would automatically insert it into the queue. And then we’d score it based on whether it was a high priority or low priority.
And then we would basically run our scrum teams based on what was coming out of those priorities, basically coming out of AHA. Nice piece of technology, actually. We really enjoy using it.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, the only AHA I know is the song Cake on me. Anyway, and I know you’re a magician because I can see the, I don’t know why I brought that up, but I can see the guitars behind you. Last question, we’ve got about two minutes left.
Let me ask you about consolidation. So we just, the day we’re doing this conversation, there was an announced merger between two big insurance companies merging together. So we continue to see consolidation in the retirement industry.
What does that mean long-term for things like technology? Do you get the best of both worlds when you bring those two companies together? There’s one less retirement company out there now.
Scott Parry, Wealth Fintech Executive
Well, that was kind of a nightmare as a vendor because you’re losing clients, right? You’re watching your client base drain away just through mergers, right? And also if they have two different solutions, like if they’re using Relias in one division and the other business is using Trap, they’re gonna make a decision.
Let’s hope they make the right one for you. So that’s not always a great thing for the vendors. From the provider point of view, yeah, you’ve got, it’s also complicated because now you’ve got a, I’ve actually been asked, talking to a firm about coming in to be a project manager for two banks that have merged and they have two different trust departments and one’s on one FIS trust system, the other is on another FIS trust system, which I used to run both those businesses.
So they’re talking to me, well, I have some knowledge about them, about what would be the best system to be on. And my answer might be go to a different company. But there’s complexity in that, right?
So it gets complex. Like what’s, one bank has a huge trust department on one system. Another bank has a smaller trust system on another system.
Well, who’s got the better operation? About the people, who’s got a better team? And they know that one system.
And maybe it’s not the best system, but they know it and getting them to change is gonna be difficult. Obviously you’ve gotta do a migration from one system to the other. Hopefully your vendor will help you do that.
So there’s a lot in those. When I was at Citizens and the CTO at Citizens, we acquired a registered investment advisory firm and we took probably two years to basically integrate that RIA into the citizen’s infrastructure from the most basic like email, right? To like secure, like a small RIA doesn’t have as high security as a massive bank, right?
So, we found they were using a piece of software that was coming out of Moscow and they’re like, oh, it’s great. I was like, okay, that’s great. But Citizens can’t be using, have a vendor that’s based in Moscow.
It’s just not gonna go well, right?
Jeffrey Snyder, Broadcast Retirement Network
So- Yeah, I can’t see the state departments. I couldn’t see the state department signing up for that, at least in today’s environment.
Scott Parry, Wealth Fintech Executive
Maybe back then, maybe, but- Their biggest thing was, well, the FBI uses this technology. I was like, that’s not a good thing.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, that’s, I don’t know if I would base everything on the FBI. God, clearly it’s an evolving world. There’s a lot of technology.
There’s a lot on people’s shoulders in terms of evaluating the technology. Look, we’re not gonna be able to get to every detail today, but I hope that you will come back again very soon. And look, we’ll continue the conversation.
Scott Parry, Wealth Fintech Executive
Yeah, no, there’s a lot to talk about. There’s definitely, there’s more to talk about with mergers because there’s different, and what’s going on in the industry, right? People are selling, they’re merging, they’re just getting out, they’re closing down, they’re outsourcing.
FIS was a huge on outsourcing, trying to get firms to basically offload their operations folks. And so there’s definitely ways to stay in the business if you want to versus just selling like Prudential did or like Mass Mutual did. Love to have that conversation as well because there’s certainly a size that makes sense.
We try to do outsourcing in Relias. It didn’t quite work. Worked great for the Omni clients.
So there’s certainly a size difference that makes sense. I’d love to come back and talk about that as well. I’m sorry, they were doing lawn maintenance as we were talking.
So if you heard any background noise, it was the blowers out there.
Jeffrey Snyder, Broadcast Retirement Network
No, we did not hear it, but I hope the blowers did a good job and your house looks great. Great to talk to you. And look, we look forward to having you back again very soon, sir.
Scott Parry, Wealth Fintech Executive
Great, thank you, Jeffrey.